## Facts

- Residential tenants Judy Teller and Barbara Hager rented premises from landlord Martin McCoy.
- The tenants alleged serious defects that rendered the premises unsafe, unsanitary, and uninhabitable and asserted the landlord failed to remedy them.
- In the Circuit Court of Logan County, the tenants claimed breach of an implied warranty of habitability.
- The tenants sought partial summary judgment and judgment on the pleadings; the circuit court denied both.
- On the parties’ joint motion, the circuit court certified questions of law to the Supreme Court of Appeals of West Virginia regarding the existence, waiver, and consequences of an implied warranty of habitability, including remedies and defenses.
- The appellate court resolved the certified legal questions and left disputed facts for further proceedings in the trial court.

## Issues

1. Whether residential leases include an implied warranty that the landlord will deliver and maintain premises in a fit and habitable condition, and whether any such warranty may be waived.
2. Whether the tenant’s covenant to pay rent is dependent on the landlord’s compliance with the implied warranty of habitability.
3. Whether uninhabitable conditions caused by the landlord’s failure to maintain the premises amount to failure of consideration and breach of the rental agreement.
4. What remedies and damages are available to tenants for breach, including vacating, damages/setoff, and related measures of recovery.
5. Whether breach of the implied warranty of habitability is a defense to the landlord’s claims for rent, damages, or unlawful detainer, and whether a court may require escrow of future rent during litigation.

## Decision

- The court recognized an implied warranty of habitability in written and oral residential leases, requiring the landlord to deliver habitable premises at the start of the tenancy and to maintain habitability thereafter.
- The court held the warranty is nonwaivable as a matter of public policy.
- The court held the tenant’s duty to pay rent is dependent on the landlord’s performance of the implied warranty of habitability.
- The court held breach of the implied warranty may be asserted as a defense to actions for unlawful detainer and to actions for rent or damages.
- The court held that upon breach, a tenant may vacate and end the obligation to pay rent, or remain in possession and seek damages by action or counterclaim.
- The court approved a damages measure based on diminished rental value during the breach and permitted additional recovery for proven annoyance and inconvenience.
- The court held that, after a factual finding that a breach issue exists, a trial court may in limited circumstances order future rent (or part) paid into escrow during the case, but only on the landlord’s motion and after notice and a hearing.

## Legal Principles

- Residential leases are treated primarily as contracts, and the landlord’s obligation to provide habitable premises is implied in the agreement.
- The implied warranty requires delivery and continued maintenance of premises in a fit and habitable condition.
- The tenant’s covenant to pay rent and the landlord’s warranty of habitability are dependent covenants; material noncompliance can justify reduced or excused rent liability.
- Waiver or disclaimer of the implied warranty of habitability is unenforceable when contrary to public policy.
- Tenant remedies for breach include: vacating and terminating rent obligations, or remaining in possession and later recovering damages or asserting setoff/counterclaim.
- Damages are measured by the difference between the fair market value of the premises as warranted and the fair rental value as occupied in defective condition, plus proven annoyance and inconvenience.
- Courts may use prospective rent escrow as a temporary measure during litigation, subject to procedural protections and limited use.

## Conclusion

The court adopted a modern contract-based rule for residential leasing by recognizing a nonwaivable implied warranty of habitability, making rent obligations dependent on habitability, authorizing defensive and affirmative tenant remedies (including diminished-value damages and annoyance/inconvenience), and permitting limited rent-escrow orders during litigation.


Teller v. McCoy, 162 W. Va. 367, 253 S.E.2d 114 (W. Va. 1978)